Despite countless efforts at reform by businesses, government, and consumer groups, health care costs continue to be very high in the U.S. as compared to other nations. The reasons are too complex to cover in one article, but three health care experts, drawn from the areas of insurance, providers, and research, recently shared some thought on where we stand with health care costs, and what employers and individuals can expect in the near future.

The three perspectives offer different but overlapping views on what drives health care costs and what can be done to ease the burdens those costs create.

Regulation and systemic inefficiencies

Marcy Buckner is vice president of government affairs for the National Association of Health Underwriters (NAHU), an association that represents more than 100,000 insurance brokers, agents, and consultants.

Buckner said that an aging population, higher pharmaceutical costs and increased utilization as the Affordable Care Act took effect have all contributed to rising health care costs. A NAHU white paper, published in June 2015, found that those factors, along with new technologies and system inefficiencies, can be major contributors to rising health care costs.

The utilization piece comes as more people are being covered under the Affordable Care Act. With more people using health care services, many are being treated for conditions that they may have not sought treatment for before, Buckner says.

“With coverage comes the opportunity to use that coverage,” she says. “There are a lot of folks who are newly-insured under the ACA, a lot who weren't covered because of pre-existing issues. Of course we want them to seek coverage, but it does result in higher costs overall.” With this new cohort of insured people, there is also increased demand for pharmaceuticals, which contributes to rising drug costs.

The NAHU report also found that inefficiencies and duplication of procedures lead to higher health care costs. Among the inefficiencies mentioned by Buckner are companies that don't offer enough options to their workforce. “It's important for employers to work with their broker to look at their workforce and determine what type of plan will be best for them,” she said. For example, coverage terms and copays are likely to be different for a plan that appeals to younger people than older people or workers with families. Those differences can end up costing both the consumer and the health care system more.

Although the NAHU white paper flagged governmental regulations as a cost-driver, Buckner said that the mandatory prevention coverage that is part of the ACA may end up helping hold down costs. “The thought is to spend a little bit of money with wellness and prevention upfront, then those people will be healthier and need less treatment,” she says. “So far, the studies have been very supportive of this.”

However, those changes will take time, she notes. “[The ACA] is only six years old; there's only so much that we could have seen from some of these market regulations,” Buckner said. “It's really like trying to turn the Titanic; you can't turn it on a dime.”

A better approach to obesity

Ted Kyle is former chair of the Obesity Action Coalition (OAC), and founder of ConscienHealth, a company that works with providers on evidence-based approaches to health and obesity. As a board member of OAC, he works with the non-profit to advocate for those affected by obesity and to raise awareness of treatments for obesity and related conditions.

The OAC notes that obesity affects more than 93 million Americans, and more than 33 percent of Americans are affected by excess weight. The group has launched the Your Weight Matters campaign, which provides tools for individuals to work with their doctors in addressing obesity and educating patients on evidence-based strategies.

As a chronic disease linked to many other expensive conditions such as diabetes and heart disease, obesity has been the focus of many efforts — but not all of them have been effective. But Kyle says that over the past few years, more evidence-based approaches have grown in popularity, and more importantly, insurance carriers have begun to cover effective treatments more consistently.

“Treatment of obesity is routinely not covered by health plans,” he says. “The future is where we get away from the bad old habits, where obesity care is viewed as a lifestyle rider in a benefit package.” Kyle notes that obesity is more linked to genetics than lifestyle choices. “Research has proven that yes, people have choices to make, but no one chooses to have a chronic disease. You make a choice in how to respond,” he says. “The scientists and clinicians know that [obesity] only gets worse when you blame the patients.”

Kyle notes that one popular solution among employers, wellness programs, has had mixed results. “There are companies that have implemented wellness programs and promotion of wellness within their company culture,” he said. “And that can be helpful.”

On the other hand, he says, programs that give rewards for employees who hit biometric targets are both unpopular with employees and of questionable value in addressing obesity.

“It can be a bit of a shell game; it's done in the name of wellness, but the goals are set up in a way that people who have been living with this all their lives are never going to achieve them,” he says.

However, Kyle says Medicare and the American Medical Association have helped lead the way in acceptance of evidence-based solutions. “We're coming from a place where health plans really didn't do a good job of dealing with obesity, and that's why health costs have built up,” he says. “But today, there's more recognition of cost-benefit of therapies like intensive behavioral care and bariatric surgery. Things are improving, but for folks who are living with obesity, it is frustratingly slow.”

Making better choices

The Health Care Cost Institute (HCCI) is an independent nonprofit that is funded by both insurers and private foundations. The group provides insurance claims data to researchers and policymakers.

David Newman, the group's executive director, said his group believes the biggest cost driver for health care is technology. But he adds that changes in attitudes towards medicine and patients' expectations have also evolved and made a difference. “In the old TV show, Dr. Kildare used to walk into a ward with eight patients,” he says. “Today, everyone is in a private room. What we demand and what is delivered has changed dramatically over time.”

He notes that at one lecture, a slide went up that asked people to pick which was the lobby of a five-star hotel, and which was the lobby of a hospital. “They couldn't,” Newman says. “Hospitals are competing on amenities.”

In some ways, Newman says, this is just a result of living in a relatively wealthy society. “At the end of the day, if people's lives can be extended by spending more money and people are healthier—those are good things.”

“We're not all wealthy,” Newman says. “But this is probably the best time to live, from an income and health perspective.”

Newman said it's become popular to talk of giving consumers more financial incentives, or “skin in the game,” to shop around for health care and thus drive down prices. But he says research has shown this approach has limits. “Clearly, when I'm on the way to the ER, I'm not shopping,” he said. “Some things are worth shopping for, but many things are not shop-able.”

Newman said that instead, the focus should be on helping institutional health care purchasers, such as employers, make good choices in health plan design and networks. “If an employer or insurance carrier negotiates a better price with a provider,” Newman says, “every consumer gets that benefit, whether they shop or not.”

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